Social Media

Why OneRiot Dropped Its Real-Time Search Engine

This post is made possible by Microsoft BizSpark as a new part of the Spark of Genius series that focuses on a new and innovative startup each day. Every Thursday, the program focuses on startups within the BizSpark program and what they're doing to grow.

When we first encountered OneRiot about two years ago, it was starting up as a real-time search engine. When users searched for a keyword, website, or specific URL on OneRiot, it returned content that people were discussing in real-time rather than then the standard reference information that search engines like Google return. After its official launch in May 2009, it quickly developed into one of the leading companies in this space — securing $27 million in funding along the way.

Last month, OneRiot decided to abandon its successful consumer-facing search engine and instead focus on its ad network, which leverages the same technology. By processing the enormous number of conversations going on in social networks (OneRiot calls this process its "trending topics engine"), the company can serve ads that are relevant to what people are engaging with online. For instance, after Duke won the NCAA tournament and social networks were buzzing with Duke references, OneRiot was able to serve advertisements for its client CocaCola that featured coverage of the Duke game.

The company announced its shift away from search in a blog post and shortly after transferred its search partners to former real-time search competitor Topsy. CEO Tobias Peggs explains how the company made the decision to transition.

A Matter of Focus

Peggs, who left his position as the president of strategy, sales, distribution, and marketing to take over as CEO in July, calls OneRiot's decision to shut down its search engine "100% a matter of focus."

Since January, the company has essentially had two products that both relied on the same underlying technology. One was the real-time search engine, and the other was an advertising product built to monetize real-time web applications that, like the OneRiot real-time search engine, use real-time data or content streams. This second product, which they originally called "RiotWise," was bringing in a lot more revenue than the search engine.

"We had a very exciting new ad product, and we needed to stay ahead of it," explains Peggs.

The best way to take full advantage of the ad network, which was "taking off like a rocket," was to make it the exclusive project. While Peggs admits that steering away from the search engine that the company had spent more than a year building could have been emotionally tough, emotions aren't a great way to make business decisions.

"The bottom line is when you look at the data and see the opportunity that you’ve got in front of you, if you didn’t take the decision that we gave, which is focus on the massive revenue opportunity there, then you would have made the wrong decision.”

Maximizing Potential

A recent comScore study found that more than 23% of all display ads on the web are on Facebook Pages. Yet, the social site's advertisers still pay less to advertise on Facebook than they do on sites that aren't social networks — something Peggs thinks highlights the potential opportunity for OneRiot's ad network.

“What that means essentially is that there is a massive opportunity to deliver better advertising on the real-time social web," he says. "We believe that it’s because if you look at the user intent on the social web, people are interested in what’s going on right now and what their friends are talking about right now."

Peggs subscribes to the theory that in order to reach an audience on the real-time social web, advertisers need to become publishers. In other words, display ads on real-time platforms like social networks need to accommodate users' desire to talk about what's happening right now. Users won't necessarily click on a static ad, but they might click on an ad that relates to an upcoming trend. The time OneRiot spent developing a real-time search engine gave it a distinguishing ability to help advertisers pinpoint those trends.

We're interested to see how its product will compete with Twitter, which has made a move to control in-stream advertising on third-party apps like HootSuite with promoted tweets. OneRiot also serves ads on third-party Twitter apps, but it has the advantage of not being solely concentrated on them. Even if it proves hard to compete with Twitter in its own ecosystem, there is plenty of ad territory on real-time search engines, social media discovery sites, and other "now-driven" websites that would be smartly filled using OneRiot's strategy.

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